Housing advocates want city foreclosure policy eased

Housing advocates trying to keep financially distressed Buffalo homeowners from losing their homes have drafted a proposed policy to keep city officials from auctioning properties delinquent only on garbage user fees.

The proposal is among several changes to the city’s foreclosure rules pushed by nonprofit organizations.

“I think people recognize the current system isn’t functioning the way it’s supposed to,” said Sam Magavern, co-director of the Partnership for the Public Good.

The changes in the way the city deals with those who have not paid their property taxes and fees have been submitted to the Common Council by Majority Leader Demone A. Smith of the Masten District.

“The last thing the city wants to do is take away people’s houses,” said Smith, who hopes the changes will be adopted in time for the city’s foreclosure auction next year.

Whether the Council or the Brown administration will accept the proposed changes is not clear. But given Smith’s position as the council’s majority leader, his sponsorship is significant. Smith is also an ally of Mayor Byron W. Brown.

The Brown administration will review the proposal and assess its impact, said Corporation Counsel Timothy A. Ball.

Among the proposed changes:

• Owner-occupied properties with one to four units would not be foreclosed upon and sold at mass foreclosure auctions strictly because of delinquent garbage user fees. Unpaid user fees would still be a lien on a property. Also, the proposed legislation would still allow for eventual foreclosure under a different part of state law, but it would be a much lengthier process that provides more notice and more opportunities to contest a foreclosure.

• The garbage user fee would be billed quarterly instead of the current practice of billing once a year and then sending follow-up postcards that do not include the amount due.

• The threshold for an overdue fee or tax triggering a foreclosure would increase from $200 to at least $500.

• A fund would be established help low-income property owners who cannot pay their bills, although the proposal does not describe from where the city would get the money.

• Partial payments of unpaid taxes and fees would forestall foreclosures. The city currently holds partial payments from property owners, but it does not apply the funds until the full balance is paid, so until then the partial payments do not delay foreclosure.

• The city would accept payment by cash, certified funds or a credit card and by personal check 30 days before the auction. Currently, the city does not accept payments online or by credit card once a property is on the auction list.

• All city departments would share a uniform registry of names and addresses associated with each property. This would allow property owners who move to notify City Hall only once about an address change, rather than several departments.

• The city would be prohibited from selling a foreclosed property at auction if the property owner was not notified according to the address on file.

• The city would be required to send a letter with the warning, “You may lose your home,” in bold, large type, to addresses on the city’s auction list after a first notification is sent, along with a list of nonprofit organizations that can help. The city would also be required to make three attempts to reach the property owner by telephone to tell them that their home is in jeopardy of being sold at the auction.

• The city’s process of allowing delinquent property owners to set up an installment plan to pay back their debt would be formalized. The city sets up payment plans with property owners during the week before the city auction, but the proposed changes will make installment plans more widely available.

• City officials would be allowed to forgive interest and penalties if debts are paid following an installment agreement.

The changes balance the city’s need to collect payments with the public benefit of keeping people in their homes, especially in a city with so many vacant houses, supporters said.

The proposals come in the wake of a Buffalo News article last spring spotlighting an Amherst couple whose $147,000 Parkside rental home was sold at auction because of $600 in unpaid garbage user fees. The couple insisted foreclosure notices never reached them after they moved. They eventually got the house back – but only after hiring lawyers, going to court and missing work trying to straighten out the bureaucratic nightmare.

Advocates who work with people whose properties are in foreclosure have objected to the city’s practice of selling houses at auction where only user fees are owed.

On the 4,235 properties eligible to be auctioned in October because of delinquent city bills, 44 percent are on the list only because the property owner did not pay the user fee.

“We just think it’s a harsh, harsh remedy,” said Joseph A. Kelemen, executive director of the Western New York Law Center. “The policy creates vacancies. We would like to avoid that, and I imagine the city would like to avoid that, as well.”

The five-page draft ordinance was written by housing advocates from the Western New York Law Center, the Legal Aid Bureau, Legal Services for the Elderly, Volunteer Lawyers Project and the Partnership for the Public Good.

The draft is preliminary, and Smith said he anticipates that the Council and the Brown administration will determine whether the changes are practical. The public will have a chance to weigh in, he said.

The city already has a list of properties in danger of being auctioned in October if payments are not made. It is highly unlikely the proposed changes could be adopted in time to affect those properties. But Smith hopes changes to foreclosure procedures will be made in time for the next round of foreclosure proceedings, which begin early next year.